Jitters Leave Italian Debt Lagging Spanish Peers

By

Nick Cawley and Neelabh Chaturvedi

March 4, 2013 9:45 a.m. ET

Investors are casting a more favorable eye on Spanish debt while the political turmoil in Italy shackles demand for Italian bonds, with the extra yield demanded by investors to hold Spanish government bonds instead of Italian sovereign debt Monday narrowing to its tightest level in 11 months.

Italy has found itself as the biggest concern for investors in the euro zone ever since general elections late last month left no party with enough seats to claim a majority in both houses of parliament, having previously enjoyed a...